Caspian Energy Inc.: East Zhagabulak Production Contract

TORONTO, ONTARIO--(Marketwire - Nov. 9, 2009) -

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Caspian Energy Inc (the "Company")(TSX:CEK), an oil and gas exploration company operating in Kazakhstan, today announces that Aral Petroleum Capital LLP ("Aral"), in which the Company holds a 50% indirect interest, has received a signed Protocol of Direct Negotiations, dated 15 October 2009, from the Ministry of Energy and Mineral Resources, that sets out the agreed basis for the Production Contract for East Zhagabulak oil field.

East Zhagabulak

The East Zhagabulak structure is a low amplitude, north-south trending anticline, limited on the east and south by faults.

The KT-I and KT-II reservoir sections of the East Zhagabulak oil field are located at a depth range of 4100 to 4600 meters and are composed of organic limestones and shales of Middle Carboniferous age. The numerous permeable intervals range from 1 to 10 meters thick and are separated by dense limestone stringers. Average porosity is 8% and average water saturation is 32%.

The oil produced from East Zhagabulak has an API gravity of 36 degrees and a solution GOR of 1,415 scf/stb. The reservoir has an H2S content of 4%. The initial reservoir pressures range from 5601 psia at 4,199 m TVDSS in the KT-I to 8500 psia at 4,349 m TVDSS in the KT-II. Aquifer support is interpreted to be the drive mechanism but it will need to be augmented by water injection during the development phase.

The East Zhagabulak field is currently producing at approximately 380 barrels of oil per day from one well in the Pilot Production Phase. Two wells are capable of production but only one well, EZ-301, is currently producing. EZ-213 is shut in pending a workover to put the well on pump in middle November 2009.

The development of 2P reserves envisages the drilling of three new producers with one expected to be converted to a water injection well in the future, along with the installation of water injection and gas utilization facilities at a total capital requirement of approximately 71 million undiscounted USD. The development for 3P reserves, consisting of an additional three new producers, with one expected to be converted to a water injection well in the future, for a total of eight producers, is expected to cost an additional 41 million undiscounted USD. Full development is expected by Year 2012 when peak production is estimated to reach 6,170 bopd. Estimated production rates do not include production from two wells prior to their conversion to injection wells.

Commenting on the protocol, Charles Summers, President and COO of Caspian said:

"Early this year, we began the application process to convert this area of the North Block from the existing exploration contract to a 25 year production contract. This protocol represents an important milestone in this process. This signed protocol sets out the main points of the contract to which we have already agreed and reflects several months of negotiations. We would like to express our appreciation of our local partner's efforts in this matter and our gratitude to our employees for their industry and dedication.

Caspian believes the economics of the East Zhagabulak field are robust. This 25 year contract will provide the company with a solid production profile. Revenue from the increased production and export of oil from East Zhagabulak oil field will allow for further exploration pursuit of additional prospects already identified in the Company's "North Block" exploration contract area. The development of the infrastructure for East Zhagabulak has the additional benefit of establishing a core area that can be that can be utilized by future discoveries."

CAUTIONARY NOTE

Some of the statements and information contained in this news release may include certain estimates, assumptions and other forward-looking information. The actual performance, developments and/or results of the Company may differ materially from any or all of the forward-looking statements, which include current expectations, estimates and projections, in all or in part attributable to general economic conditions, and other risks, uncertainties and circumstances partly or totally outside the control of the Company, including oil prices, imprecision of reserve estimates, drilling risks, future production of gas and oil, rates of inflation, changes in future costs and expenses related to the activities involving the exploration, development, production and transportation of oil, hedging, financing availability and other risks related to financial activities, and environmental and geopolitical risks. Further information which may cause results to differ materially from those projected in the forward-looking statements is contained in the Company's filings with Canadian securities regulatory authorities. The Company disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws.